iPhone at Wal-Mart? Steve, Say it Aint So!

Apple (AAPL) will soon be selling its industry leading, flagship product at Wal-Mart (WMT)? Yes, we know times are tight, but what does this do to the cachet? To the experience? To the brand? It’s not as though there are any Geniuses working at Commodity Central. The only good news is that it’s going to be $197 and not $99 as speculated on Saturday.

But why not Target (TGT) (pronounced tahr-jey)? While (like Wal-Mart) they have high volume and ruthless cost-cutting, they have a more upscale clientele and image. Yes they have only 1500 US stores vs. 3800 in Wal-Mart (I suspect the deal is US only), but they are already selling the iPod Touch.

There is the old joke about haggling over the price. Now we know Steve’s price. Perhaps this suggests even more strongly that he’s a short-timer, since the short-term gains may be outweighed by the long term brand erosion.

Comments

[jmmx:]

Bah - humbug

Walmart will put the iPhone in front of millions of new customers. I am no fan of the place (never been in one actually - tho I am impressed with their energy policy). Still, as an Apple long, I am happy to see them get there.

Apple builds their own image.

IMHO

2008 Dec 09 03:52 AM

[rd4sndk:]

Perhaps the ipod-touch isn't selling as well at Target. With Walmart, you get twice the number of venues. Its now apparent that most of Targets clients are shopping at Walmart as well but vise verse is not true.

I do believe that Walmarts electronics department leaves a lot to be desired from a customer support perspective but Targets not any better if not worse.

What I believe is happening here is Apple is using this time as a training ground for what's about to happen in 2H09 when they release their low cost iphone version with PA semi's power management processor. I don't believe that Apple feels as though many iphones will be sold in Walmart until the below $100 price point is made.

Finally, if you're apple and you know that you're about to release a product that's going to sell close to 100 million with possibly 20 million the first month, you'll want as many POS as possible to improve the customer purchase experience. Also, Walmart is the largest toy retailer in the world. We know that once Apple crosses the $100 unit price, these things will become a major competitor to the WII, xbox and Playstation. No better place to compete in the electronic gaming market than at Walmart.

2008 Dec 09 05:22 AM

[BJMC:]

rd4

I do believe that you are spot on!

The associated monthly fees need addressing also for this market segment. Presumably the Apple price of the device will allow this.

2008 Dec 09 06:43 AM

[KidCityNY.com:]

I couldn't agree with you more! We consider Target to be a top store for families who love style as much as price, so alas we only wish they would have chosen them. Still, anything that gets Apple products into more hands makes the world a more beautiful and functional place!

2008 Dec 09 08:07 AM

[digivision:]

If wallmart gets the iphone it wont be long before Target gets them as well
unless of course wallmart has Apple sign some exclusivity deal.

2008 Dec 09 08:21 AM

[e1618978:]

Selling iPods and iPhones at Wal-mart is fine, and they will probably sell them at Target also. Your suggestion of brand erosion is laughable - have you never shopped at Wal-mart? Everyone I know has, even the millionaires.

2008 Dec 09 09:16 AM

[tomtully:]

This is actually brilliant. The brand won't suffer as it is bullet proof, providing there is no discounting per se. The brilliance is that all of these consumers will now have a chance (probably a first) to experience the "Apple/Mac" interface and brand. How many MacBook or iMac sales will come as a result of this? Huge opportunity...and I should know because I'm a Windows guy that converted to a MacBook Air and a Windows Mobile guy that converted to an iPhone!

2008 Dec 09 09:36 AM

[e1618978:]

The Nintendo Wii is sold at Wal-mart [sarcasm] "oh no - the poor people can touch them, brand erosion!" [\sarcasm]

The more I think about your article, the dumber it seems. Dumbest thing I have read this week for sure.

2008 Dec 09 09:43 AM

[nonam:]

Since the Black Friday trampling I have decidedly boycotted WalMart and hope that all others will follow suit. Every single one of them should be bulldozed regardless of what they sell and at any price.

2008 Dec 09 10:34 AM

[emilyposter:]

Smug but wrong...so wrong.

2008 Dec 09 10:39 AM

[Roger Knights:]

Well, it's not Crazy Eddie's.

(Too bad Radio Shack didn't make the deal. Even if Steve's terms were harsh, the iPhone would be a great loss-leader to get customers into their stores.)

2008 Dec 09 11:32 AM

[Stephen Ros...:]

Please don't be so elitest. Walmart is a fine venue for Apple products. Apple has rolled out the iPhone all over the globe. Now they enter the country of Walmart.

2008 Dec 09 11:51 AM

[Warnin4U:]

Folks, I hate to be the one bringing you the news but WalMart is THE retailer in the USA. Unless you are a boutique product, if you aren't in WalMart you aren't in business. Much of Walmarts competition is spiraling downward as the consumer age ends. Jobs is just doing what Jobs always does - making a move no one expected and turning the market upside down.

2008 Dec 09 12:12 PM

[mollytjm:]

Apple knows that in this economy, the strong, aggressive player will beat the competition. you can buy ipods everywhere and it never hurt the brand! This is a company that knows what it's doing in a WORLDWIDE marketplace. Did you see the opening of the store in Germany? amazing..no one garners that kind of excitement in retail except Apple. I'm sure Dell is looking over it's shoulder!

2008 Dec 09 02:46 PM

[KenC:]

If Apple were to suffer "brand erosion" it would have already happened seeing as Apple has been selling iPods at Sams, BJs, Costco and others for years.

2008 Dec 09 09:52 PM